(CercleFinance.com) – Wall Street recovered on Friday after its downward movement at the opening, caused by employment figures which revived fears that the Fed would refrain from lowering its rates in March.
At the end of the morning, the Dow Jones advanced almost 0.4% to 37,583.5 points, while the Nasdaq Composite gained more than 0.7% to 14,616.1 points.
Investors initially reacted negatively to the latest employment report, which showed that the American economy had created 216,000 jobs in December, while the consensus expected only 150,000.
‘But the job creations for the months of October and November were significantly revised downwards, by around 71,000 units’, temper Commerzbank analysts.
‘This shows that the dynamics of the labor market are starting to run out of steam,’ they add.
‘It’s difficult to extract the signal from the noise in this employment report but it seems very unlikely that it will change the situation for the Fed,’ adds Bastien Drut, head of strategy at CPR AM.
After having crossed the 4% mark upwards following this statistic, the yield on 10-year Treasuries fell again during the morning to now settle at around 3.96%.
Same reversal of polarity on the side of ‘futures’ on American short rates, since the proportion of traders betting on a rate cut of 25 basis points on March 20 rises to 69%, against 53% this morning.
It is true that the ISM services index, published shortly after the opening, reassured stakeholders by coming out at 50.6 last month, compared to 52.7 in November, while economists expected it on average around 52.
The component measuring employment particularly deteriorated, to 43.3 compared to 50.7 in November, due to companies’ stated desire to reduce their costs in the face of current economic uncertainty.
On the oil market, the price of American light crude increased by 1.8% to $73.5, still supported by geopolitical factors. WTI is headed for a 4.8% gain this week.
Over the entire week, shortened due to New Year’s Eve, the trend is downward for the American stock markets, which clearly illustrates investors’ uncertainties regarding the horizon of the Fed’s rate cuts.
The Dow Jones lost 0.8% at this stage while the Nasdaq lost around 2.7%.
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